International Marketing Exam #1

Why is all business considered international?

Competition, supply chains, raw materials, and customers often come from abroad.

Why study international marketing?

Growth opportunities are abroad, domestic markets are saturated, and firms must adapt to global competition.

What is Total Addressable Market (TAM)?

The total revenue opportunity if a company captured 100% of its target market.

What is the main challenge of international marketing?

Adapting the 4Ps to different uncontrollable environments (political, economic, cultural, technological).

What are the two pitfalls in international marketing?

Ethnocentrism (thinking home market is best) and Self-Reference Criterion (unconscious cultural bias).

What is global awareness?

Understanding history, cultural differences, and economic/political/social trends globally.

What are the four pathways to globalization?

Export → Multinational → Pan-regional → Global strategy.

What is a “born global” firm?

A company that seeks international advantage from inception (e.g., Spotify, Airbnb).

What are the core motives for going global?

Growth/profit, follow customers abroad, access resources/capabilities, respond to competition.

What skills are essential for global business teams?

AI/data literacy, communication, cultural intelligence, adaptability, global awareness.

What is absolute advantage?

Ability to produce more efficiently (using fewer resources).

What is comparative advantage?

Ability to produce at a lower opportunity cost than others; basis for trade.

Why can trade benefit all nations?

Comparative advantage makes trade a win-win if ratios are mutually beneficial.

What is rent-seeking?

When groups lobby for trade barriers to protect their interests.

Comparative vs. Competitive Advantage

Comparative = lower opportunity cost (macro level). Competitive = firm-level edge (price, quality, niche).

What are tariffs and their impacts?

Taxes on imports; raise consumer prices, spark retaliation, harm efficiency.

What are quotas?

Limits on the amount of a product that can be imported.

What are Voluntary Export Restrictions (VERs)?

Agreements where exporting nations “voluntarily” limit exports under pressure.

What are non-tariff barriers?

Standards, subsidies, Buy National laws, regulations that restrict trade.

What are capital controls?

Rules limiting the flow of money and investments across borders.

What is the balance of payments?

A record of all financial transactions between a country and the rest of the world.

What’s the difference between floating and fixed exchange rates?

Floating = supply/demand driven. Fixed = pegged by government (often to U.S. dollar).

Who benefits from a strong currency?

Importers (cheaper imports). Exporters dislike it (their goods become more expensive abroad).

What are the roles of the World Bank?

Support development, fund infrastructure/education/health projects, reduce poverty.

What are the roles of the IMF?

Promote monetary cooperation, financial stability, provide loans and policy advice.

What was GATT’s purpose and weakness?

Reduce tariffs (1947), succeeded by the WTO (1995). Weakness = non-binding dispute resolution, focus on goods only.

What are the key principles of the WTO?

Non-discrimination, reciprocity, transparency.

What’s the difference between G7 and G20?

G7 = top 7 industrialized nations; G20 = broader group needed for today’s global economy.

What are the drawbacks of protectionism?

Raises prices, provokes retaliation, hurts efficiency, delays economic adjustment.

What are the benefits of free trade?

Lower prices, more product variety, job creation, innovation, growth.

What are the controversies of globalization?

Exploitation of labor, environmental damage, erosion of local cultures.

What idea was central to U.S. foreign policy in the 19th & 20th centuries?

Manifest Destiny & Monroe Doctrine.

What caused the Opium Wars?

Britain wanted to fix the trade imbalance with China → sold opium from India.

What were the consequences of the First Opium War (1839–1842)?

Treaty of Nanjing, Western dominance, and the humiliation of China.

What happened during the Second Opium War (1857–1860)?

More freedom for foreign traders, Christian evangelism, and the destruction of Beijing’s Summer Palace.

What major Chinese uprising was linked to foreign dominance in 1900?

The Boxer Rebellion.

Why do Chinese leaders remain wary of foreign influence today?

Legacy of humiliation from Opium Wars & Western dominance; correcting past inward focus → Belt and Road Initiative.

Who said “Culture is the human-made part of the environment”?

Melville Herskovits.

Who said “Culture is to society what memory is to individuals”?

Harry Triandis.

What metaphor describes how people don’t recognize their own cultural assumptions?

“Fish can’t see water.”

What factors make up culture?

Traditions, morals, habits, religion, art, social systems, and language.

How did geography influence American individualism, according to Frederick Jackson Turner?

The vastness of America encouraged independence and self-reliance.

Why is geography important in marketing?

Affects consumption habits, product adaptation, logistics, risks, and competitive positioning.

How does U.S. energy consumption compare globally?

U.S. = 5% of population, consumes 24% of world’s energy.

Where will most population growth occur by 2050?

In underdeveloped regions.

What percent of the world’s population lives in cities today, and by 2050?

55% today; ~70% by 2050.

By 2030, what proportion of the world’s population will live in slums?

About 1 in 4 people.

Name at least two of the world’s largest slums.

Dharavi (Mumbai, India – 1M), Orangi Town (Karachi, Pakistan – 2.4M), Kibera (Nairobi, Kenya – 700K), Neza (Mexico – 1.2M).

What problems are linked to rapid urbanization?

Overcrowding, sanitation strain, water supply issues, slums, and uneven improvements in quality of life.

How has the global elderly population changed and how will it change by 2050?

65–84 yrs = 3x increase, 85+ yrs = 6x, 100+ yrs = 16x → pension & healthcare strain.

How many immigrants will Europe, the U.S., and Japan need by 2050?

Europe ~1.4 billion; U.S./Japan ~600 million.

What barriers exist to solving worker shortages with immigration?

Political and cultural opposition (e.g., immigration debates, Brexit).

How does geography affect product adaptation?

Climate/topography (e.g., seasons, extreme weather) require design and marketing adjustments.

What new trade route is emerging due to climate change?

The Northwest Passage (alternative to the Panama Canal).

Why are communication links critical in international trade?

They allow businesses to know where goods/services are needed and connect markets efficiently.

How has communication technology evolved?

Telegraph → telephone → television → satellite → internet → modern digital networks.

What ESG expectation do investors now have for multinational corporations?

Companies must report environmental, social, and governance (ESG) strategies and impacts.

How do the U.S. and Mexico view their relationship differently?

JFK (U.S.): “Geography has made us neighbors, tradition has made us friends.”
Mexican view: “Geography has made us closer, tradition has made us far apart.”

What are the three main ways history influences culture?

Shapes identity & values, creates a national mission/worldview, and affects business practices.